Quote:
Originally Posted by Tangeray
Just out of curiosity does anyone know how the lease payments work in these cases where the company or retailer signs a lease with the mall, but then proceeds to let it sit empty?
Does the lessee just keep paying the rent on the place the entire time or does this mean the mall covers a portion of the bill or is it negotiated on a case by case basis between the two parties etc?
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I'd imagine the lessee would still have to keep paying the rent for as long as they're obliged to in the tenancy agreement, regardless of whether the space sits empty or not.
And I can't imagine any situation in which the mall or landlord agrees to cover any part of the bill while it sits empty (especially when they could just find another actual rent-paying tenant)
Unless it's stipulated in their agreement that the space has to be occupied and running, the landlord typically won't care as long as the rent payments are made.
Although it may not be ideal for the landlord and the overall look and ambiance of the mall to have boarded up empty spaces even if the lessee is up to date on their payments.
I've seen situations where the lessee was happy enough to see their space sit empty for upwards of more than a year while they were trying to renovate or decide what to convert the space into.
Of course, these are deep-pocketed retailers (jewelers) we're talking about here, so they could afford to pay rent for an empty space for over a year.
The landlord in that case didn't care one jot either because it was a hard spot to lease out generally, and the tenant in this case was a good and responsible long-time tenant (i.e always on time with their payments)- as you would imagine most high-end retailers in a niche market like that would be.
Ultimately it depends on the relationship between the lessee and the landlord/mall, but as I said, some landlords would prefer to have the spaces occupied and running since good foot traffic for one retailer is (theoricically) good foot traffic for other retailers around them, and makes it easier for the landlord to lease out spaces.
Hard to stipulate and enforce in a tenancy agreement, though.
Think of it a bit like renting a house.
Current politics and political situation aside, would the landlord really care if the house was lived-in or sat empty the entire period of the lease agreement just as long as he was receiving the rent payments on time (and the presumably the house wasn't gettigng damaged)?
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